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BOB MOON: Talk to hog farmers in southeast Iowa about their business lately and a litany of words spring from their lips such as “catastrophe,” “decimated,” and “utterly horrible.” You might think that it’s the floods that have hurt them. But Marketplace’s Steve Henn reports it’s something else: High feed prices that are poised to drive more than 7,000 hog farmers out of business by the end of the year.
STEVE HENN: Brandon Butler’s a hog farmer in southeast Iowa. He’s watched neighbors lose all their crops and livestock, bridges wash away, and fields flood.
BRANDON BUTLER: This is catastrophic. There is no other way to describe it.
Butler’s farm sits high and was spared, but he and livestock producers are going to feel the effects of this flood. Corn and feed prices have more than tripled since 2005 and shot up again last week.
Chris Hurt’s an agricultural economist at Purdue. He says what’s really hurting hog farmers isn’t just the flood, it’s high fuel prices.
Chris Hurt: Bio-fuels are dramatically helping to increase the price of corn.
So much so that a consortium of meat producers are criticizing ethanol mandates on Capitol Hill. Dave Warner is at the Pork Producers Council.
Dave Warner: We’re not on a level playing field when it comes to competing for corn against ethanol plants.
Warner’s worried there might not be corn this year for both feed and renewable fuels. The rising price of oil is pushing up what ethanol plants are willing to pay for corn. And federal law requires oil companies to buy billions of gallons of ethanol each year — no matter what the price — to make blended fuels.
Livestock farmers can’t compete and thousands could be forced out of business. Hurt says that means shoppers are in for sticker shock in the meat aisle starting soon.
HURT: I think we’ll see new high new high records as far as we can see probably through 2012 — each year higher and higher and higher prices.
In Washington, I’m Steve Henn for Marketplace.
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